Egypt's revaluation: a prelude to unshackling the pound? | Reuters

Egypt's revaluation: a prelude to unshackling the pound? | Reuters:

"Egypt's revaluation of the pound this week has raised expectations of a major shift in how it manages a long-running currency crisis, with evidence growing that the central bank may be preparing for a more flexible exchange rate mechanism.

Economists, especially those with longer memories, believe the action may herald a period of greater volatility for the tightly-managed currency leading to a devaluation and greater flexibility, following a path that Egypt took over a decade ago.

The central bank has maintained the pound within a narrow band through regular dollar auctions introduced in 2012, but downward pressure has persisted, forcing it to allow incremental devaluations every few months."



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